Construction costs may escalate 14.1% this year, CBRE report says - Silicon Valley Business Journal

📆 2022/08/26 2:00:00
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One key factor still to be figured out: whether a slowdown in construction is coming — and, if so, the extent of it — and whether that could ease some of the demand and, subsequently, price hikes.

That's according to CBRE Group Inc. , which is forecasting a 14.1% annual increase in U.S. construction costs by the end of 2022, thanks to industry labor shortages, inflation, supply chain disruptions, ongoing impacts from the Covid-19 pandemic and the war in Ukraine. That annual price increase, if it occurs, would outpace the 11.5% escalation in construction costs seen last year.

"When you have everyone pre-purchasing materials, a lot of people are front-loading cash flows and schedules to make sure they have the labor and materials," McNamara said. Despite challenges associated with construction cost increases, Dallas-based Trammell Crow Co.

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